Uzbekistan Power Risk/Reward Index

THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

Uzbekistan Power Risk/Reward Index

• 17 Jan 2022
• Uzbekistan
• Power

Key View: Uzbekistan scores far below both the global and regional averages for almost all indicators across Industry and Country Risks. While the country's score is boosted by the modestly attractive rewards profile (at least in regional terms), factors including heavy state involvement in the power sectors of these markets and a lack of a variation in power sources drag down the country's competitive landscape scores and energy policy scores. Furthermore, a lack of economic diversification and poor political risks outlooks hamper the Country Risks ranking.

Risk/Reward Snapshot

Uzbekistan & Emerging Europe - Power Risk/Reward Index



Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions' Power Risk/Reward Index

Global And Regional Ranks

• Regional rank (out of 26): 12th
• Global rank (out of 117): 65th

Key Features And Latest Updates

• The country slightly outperforms regional averages in terms of Rewards, but receives low scores for Industry and Country Risks in particular.
• In terms of Country Rewards, Uzbekistan holds a strong economic growth outlook and a relatively large population in regional terms. However, it has become a net importer of electricity in recent years, and we do not expect this to change over the coming 10 years.
• The country's performance in the Industry Rewards section suffers from limited capacity gains and weak power demand growth in the coming five years.
• Furthermore, the country's energy market is dominated by state-owned Uzbekenergo, which operates an ageing Soviet-type infrastructure. There are also significant obstacles to access to financing and an inefficient energy tariff structure further dampens investor interest.
• Uzbekistan's business environment is unattractive and there is no transparency in the public or private sectors. Moreover, investors face a considerable currency risk, as the some is one of the worst-performing currencies globally.
• The country also performs poorly in terms of country risks, especially in terms of economic risks and long-term political risks. In contrasts, it performs much better for short-term political risks, scoring 60.3 out of 100 in our Index, largely reflecting a smooth policymaking process and broad policy continuity under Mirziyoyev.

RRI Matrix Breakdown

Uzbekistan & Emerging Europe - Power Risk/Reward Index By Component



Note: Scores out of 100; higher score = more attractive market. Source: Fitch Solutions' Power Risk/Reward Index

This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.